Balanced scorecard template
A balanced scorecard checks whether your strategy is working by measuring it from four angles at once: financial results, customers, internal processes, and learning and growth (the people, skills and systems everything else depends on). This free Excel template compares each measure's actual with its target and works out the variance, the percentage of target achieved and a red, amber or green status.
Running a company of 30 to 200 people? Documents like this are now worth money.
The balance is the point. Profit shows how last quarter went; the other three perspectives show what's building up, or wearing down, underneath it.
What's in the template
Three sheets: the blank scorecard (20 rows), an example and a read-me. Each row holds the perspective, objective, measure, whether higher or lower is better, target and actual, plus an owner, the initiative meant to move it and a comment.
From the Example sheet, a fictional food manufacturer's scorecard for July to September:
| Perspective | Measure | Better if | Target | Actual | Achievement | Status |
|---|---|---|---|---|---|---|
| Financial | Sales to all other customers (£000) | Higher | 2,400 | 2,180 | 90.8% | Amber |
| Financial | Gross margin % | Higher | 24 | 24.6 | 102.5% | Green |
| Customer | Orders delivered on time and in full % | Higher | 98 | 96.5 | 98.5% | Amber |
| Customer | Consumer complaints per million packs | Lower | 6 | 8 | 75.0% | Red |
| Internal process | Overall equipment effectiveness % | Higher | 70 | 66 | 94.3% | Amber |
| Internal process | Ingredient waste as % of usage | Lower | 3.5 | 3.2 | 109.4% | Green |
| Learning and growth | Operators trained on two or more lines % | Higher | 60 | 48 | 80.0% | Red |
| Learning and growth | Staff turnover over the last 12 months % | Lower | 18 | 17 | 105.9% | Green |
Achievement is actual ÷ target when higher is better and target ÷ actual when lower is better, so 100% always means the target was met. Status is green from 100%, amber from 90% (change this at the top of the sheet) and red below that. The variance is signed so that a positive number always beats the target.
How to build a balanced scorecard
- Start with the strategy. A scorecard tests whether a plan is working, so take the objectives from your strategic plan, not from a list of things you already measure.
- Write two or three objectives per perspective, each a short statement of what must go well: "Deliver complete and on time", not "Customer".
- Give each objective one or two measures, and define them exactly: what counts, where the figure comes from and whether higher or lower is better.
- Check the chain from the bottom up. Which skills and systems do the processes need? Which processes do customers notice? Which customer results produce the financial ones? A measure that links to nothing probably doesn't belong.
- Set each target from the plan's figures for the year, not from what feels comfortable this quarter.
- Name an owner and the initiative meant to move each measure. A red measure with no initiative behind it needs one.
- Review it every quarter at leadership or board level, and retire measures when the strategy moves on.
Balanced scorecard, KPI dashboard or OKRs?
All three put numbers against goals, which is why they get confused. They answer different questions, and a company can run all three.
| Balanced scorecard | KPI dashboard | OKRs | |
|---|---|---|---|
| Asks | Is the strategy working? | Is the business running well this month? | Did we make this quarter's changes? |
| Measures come from | Strategic objectives, in four fixed perspectives | The vital signs of daily operations | A few ambitious changes, set fresh each quarter |
| Horizon | A year or more, reviewed quarterly | Month by month, with a trend | One quarter |
| Mainly used by | Board and leadership team | Managers | Teams and individuals |
The KPI dashboard watches the running of the business, the scorecard watches the strategy, and OKRs drive the quarter's changes. One measure can sit in two places: on-time delivery might be a monthly KPI and also a scorecard measure, if reliability is part of how you plan to win.
Example: a fictional food manufacturer's quarter
The Example sheet is the July to September scorecard of a fictional 140-person maker of chilled sauces and ready meals, whose strategy is to grow beyond the two supermarkets that buy most of its output. Three measures are green, three amber and two red.
Read from the bottom up, most of the amber and red tell one story. Cross-training stalled during the summer peak, so 48% of operators can run two lines against a target of 60%. With fewer flexible operators, changeovers ran long and line efficiency missed its target, which led to two short deliveries in July and an amber on-time-in-full score. The red complaints figure has a separate cause, leaking trays from one sealing head, and its own fix.
On money alone, the board would have seen a healthy margin and sales to newer customers 9% short, and leaned on the sales team. The scorecard points to restarting cross-training instead.
Common mistakes
- No strategy behind it, so the scorecard is just a KPI list sorted into four boxes.
- Too many measures. Beyond three or four per perspective, the important ones get lost.
- A learning and growth perspective that only counts training hours. Measure what the training is for: skills in place, people kept, systems ready.
- Measures nobody can influence, or that no single person can be held to.
- Targets that ignore the plan, so the scorecard shows green while the strategy slips.
- Never changing it. When a priority is achieved or dropped, its measures should go too.
Frequently asked questions
What are the four perspectives of a balanced scorecard?
Financial (how the strategy shows up in results), customer (how customers experience you), internal process (what you must do well to serve them) and learning and growth (the people, skills and systems behind it all). Robert Kaplan and David Norton set out the idea in a 1992 Harvard Business Review article (see sources).
Can a small company use a balanced scorecard?
Yes. A 30-person company can run one on a single sheet with eight measures, reviewed by the directors each quarter. Stick to figures you already record, so updating it takes an hour, not a week.
How many measures should a balanced scorecard have?
Enough to show the strategy and no more. Two objectives per perspective with one or two measures each gives eight to sixteen. If it won't fit on one screen, it's too long to discuss.